One of the market's hottest stocks a few years ago is showing signs of life again. Vipshop Holdings (VIPS 0.57%) opened sharply higher on Thursday after posting blowout financial results. The Chinese online discounter of brand-name apparel and accessories reported net revenue of $4.2 billion for the fourth quarter, a 12.4% increase from the prior year. 

Vipshop has historically grown its business at a much headier clip, particularly between 2012 and 2014, when the stock would go on to more than double for three consecutive years. However, with the flash sale specialist's guidance calling for flat to 5% top-line growth for the quarter when it initiated that outlook four months ago, clocking in at more than double the high end of that range will definitely turn heads.

VIP homepage showing a sale on Forever 21 apparel.

Image source: Vipshop Holdings.

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Vipshop stock more than doubled in 2019. It has now more than doubled in half of the past eight years. The stock would go on to surrender 72% of its value in the four-year gap between the winning years, but investors know that volatility is part of the game when it comes to Vipshop.

It's not just investor sentiment that's turning for Vipshop. After posting 11 straight quarters of decelerating revenue growth, the e-tailer has bounced back with three quarters of accelerating top-line growth. The news gets even better on the bottom line: reported and adjusted earnings more than doubled. This is the fifth quarter in a row that Vipshop beat Wall Street's profit targets by a double-digit percentage.  

The platform's popularity is growing. The active customer count has climbed 19% higher over the past year, with the number of orders placed soaring 24% in that time. Revenue and gross merchandise volume has grown at a slower clip. The average order size is smaller than it was a year ago, but that's not a deal breaker when the model itself is excelling on so many other fronts. 

The stock is cheap by most measuring sticks. It's trading for just 12 times trailing earnings as of Wednesday's close, and it continues to have a cash-rich balance sheet. The rub here is that Vipshop's hot quarter ended in December, before we knew that the novel coronavirus was starting to rock the world's most populous nation. 

Vipshop will feel the pinch of the outbreak. It sees revenue declining 15% to 20% for the current quarter. Online shopping will naturally hold up better than brick-and-mortar retail, but folks don't need to stock up on fresh fashions -- and apparel categories continue to drive 70% of the sales at Vipshop -- when they're spending more time at home until the virus is contained. Vipshop also used some of its 10-figure cash balance to acquire an outlet mall operator to boost its real-world presence. The rebound in sales will have to wait for the health concerns to ease, and even then it's hard to say how long it will take for Vipshop to regain the momentum that was building through the final three quarters of 2019. 

You still have to like Vipshop's chances of moving higher in 2020. It's true that investing in China stocks isn't for the timid, but between its strong presence, growing audience, and cheap valuation, it's hard to bet against Vipshop.